Roundtable on Ex Officio Cartel Investigations and the Use of Screens to Detect Cartels

Abstract

Despite the successes of cartel detection over the last twenty years, there are many who believe that competition authorities have just started to scratch the surface. The focus of this note is to make the case that proactive detection and deterrence policies need to be established, and that those policies should be led by the use of empirical screens.

Though screens have gained significant popularity and adoption over the last five to eight years, with a track record including successes such as the flagging of the LIBOR conspiracy and manipulation, some competition authorities are still reluctant to adopt these empirical tools. Concerns often relate to “too many resources are required” or “lack of robustness” of current screens, or simply “screens don’t work,” among others discussed later in this note. In my view, these arguments against screens though understandable are misplaced, and this notes addresses in detail my counterarguments. As I hope this note will make clear, the effectiveness of screens should, by now, largely be beyond dispute. Can screens flag illegal behavior or not? And have they already done so? Yes they can, and yes they have already flagged large scale matters multiple times, such as on LIBOR which is perhaps the largest conspiracy and manipulation of its type ever uncovered, but I do not expect it to be the last.

Keywords: Screening, Anti-Cartel Detection, OECD, Leniency

JEL Classification: C40, K14, L41, L51